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Guarantor personal loans

Getting someone to act as guarantor increases your chances of getting a personal loan approved. But if you fail to repay the loan, your guarantor will be on the hook.

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Name Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
NOW Finance No Fee Unsecured Personal Loan
NOW Finance logo
Finder award winnerFixed18 Months - 7 Years $5,000 - $50,000
Interest Rate (p.a.)
to 26.95%
Comp. Rate (p.a.)
to 26.95%
Application Fee
Monthly Fee
Monthly Repayment
Go to siteMore Info
OurMoneyMarket Unsecured Low-Rate Personal Loan
OurMoneyMarket logo
Finder award winnerFixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
to 18.99%
Comp. Rate (p.a.)
to 21.78%
Application Fee
1.50% - 6%
min. $250
Monthly Fee
Monthly Repayment
Go to siteMore Info
Harmoney Unsecured Personal Loan
Harmoney logo
Finder award winnerFixed3 - 7 Years $2,000 - $70,000
Interest Rate (p.a.)
to 24.03%
Comp. Rate (p.a.)
to 24.98%
Application Fee
$275 - $575
Monthly Fee
Monthly Repayment
Go to siteMore Info
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How do guarantor personal loans work?

A guarantor is someone in a strong financial position who is willing to support your personal loan application. The guarantor is usually a family member, and they essentially put themselves forward to pay your loan if you can't.

If you apply for a personal with a guarantor then this increases your chances of getting the loan approved.

You might be able to borrow more if you apply with a guarantor, or secure a lower interest rate.

But if you can't repay the personal loan, your guarantor may be forced to.

The risks and benefits of getting a personal loan with a guarantor

Entering into a guarantor agreement for a loan is never without risk. The guarantor should seek legal advice and understand exactly what kind of arrangement they are entering into.

For the borrower

  • You can increase your chances of getting a personal loan approved
  • You may be able to borrow more money with guarantor support
  • You could potentially unlock a lower interest rate

For the guarantor

  • You may have to pay back the loan if the borrower can't
  • Any asset you offer as security could be at risk
  • Going guarantor can impact your credit score and other credit applications

For both parties, it's important to get legal advice before signing a loan contract. And it's important to understand that entering into a guarantor agreement can put strain on your relationship if the borrower can't repay the loan.

Questions to ask yourself before guaranteeing a personal loan

  • Am I confident the borrower can repay the loan?
  • Can I afford to repay this loan if the borrower can't? Will it put me in financial hardship?
  • Am I willing to risk an asset if the borrower can't repay the loan?
  • Have I checked every detail of the loan contract and guarantor agreement? Have I sought legal advice?
  • Have I considered alternative ways to help the borrower?

Questions to ask yourself before borrowing money with a guarantor

  • Am I risking damaging an important relationship if things go wrong?
  • Have I considered other ways to get this money outside of a personal loan? Do I really need this loan?
  • Am I confident I can repay this loan?

How a guarantor loan can affect your credit score

Being a guarantor on someone else's personal loan won't harm your credit score if the borrower is making repayments. But the lender will request a copy of both your credit reports.

And if the borrower defaults then this could harm your credit score too.

And while a guarantor arrangement won't necessarily hurt your credit score, it could make it harder for you to get a loan approved yourself.

What types of personal loans can I get with a guarantor?

There are no specific guarantor loan products. A guarantor arrangement is something lenders typically offer on their personal loan products and assess on a case by case basis.

Every lender is different but it's possible to get most personal loan types with a guarantor:

Secured guarantor loans

With a secured personal loan the borrower typically offers an asset (usually a car) as security. But if a guarantor is willing to offer something as security instead you may be able to get a secured loan with a guarantor. Secured personal loans have lower rates than unsecured loans.

Unsecured guarantor loans.

An unsecured personal loan has no asset attached to it. These loans are more flexible and often easier to get but do have higher rates. You could get an unsecured loan with a guarantor. The guarantor would not have to put a car or property up as security but they'd still be liable to repay the loan if you can't.

How much can I borrow with a guarantor?

The amount you're able to borrow with a guarantor depends on your financial situation, your credit score, the type of loan you're applying for, your guarantor's financial situation and the lender's own lending criteria.

In general, having a guarantor on your loan makes it easier to borrow more than you could alone. But the lender still needs to be satisfied that you can afford the repayments.

Use a personal loan calculator to check you can afford the loan's repayments. Be sure to factor in both the interest rate and loan fees.

Who can be a guarantor?

A guarantor for a loan is usually a parent or family member. Some lenders may accept a friend as a guarantor but check this before applying.

For most lenders a personal loan guarantor needs to:

  • Be 18 or over
  • Be an Australian citizen or permanent resident
  • Have a stable income and employment
  • Have a good credit score
  • Not be in financial hardship

If you're applying for a secured personal loan the guarantor needs to provide a suitable asset. For most lenders this is usually a car that is under 7 years old and registered in the guarantor's name.

But some lenders may accept other assets as security.

Who offers guarantor loans?

While most lenders, from big banks to online lenders, accept guarantors on personal loan applications, they aren't always upfront about it.

For many lenders, guarantors are accepted on a case by case basis. It's worth checking if a lender allows guarantors before submitting a full application.

How do I become a guarantor?

To become a guarantor you will need to:

  • Meet the lender's eligibility requirements.
  • Sign a loan contract.
  • Provide extensive details to the lender.

You should also seek legal advice before signing a guarantor agreement.

What information does a guarantor need to provide?

Every lender asks for different information, but most of them require very detailed information about your personal and financial circumstances.

This includes:

  • Personal information like your name, address and driver's license.
  • Employment details.
  • Information about all your debts, assets and liabilities, including properties and any outstanding loans.
  • Details of your average monthly spending.

Can a guarantor be removed from a loan?

There are a few ways to get out of a guarantor arrangement.

  1. You can opt out of the guarantor arrangement before the loan contract is signed and the loan has been drawn down.
  2. You can challenge the loan contract and may be able to get out of the arrangement if there is a discrepancy in the contract, you were pressured into the arrangement or you have been misled in some other way.
  3. Once the loan is approved and the borrower is making repayments it's much harder to be removed from the loan as the guarantor. You could pay out the remaining loan amount to end the arrangement or suggest a new arrangement. But the lender would need to approve this.

Can I limit my exposure as a guarantor?

You may be able to guarantee part of the loan rather than the entire amount. By limiting the amount of the loan you're guaranteeing, you can support the borrower's loan application and then be free once the borrower has paid back an agreed amount.

The lender has to agree to this arrangement, and it might not be possible on smaller loan amounts.

Are there alternatives to a guarantor loan?

Apply for a risk-based personal loan from another lender

If a bank turned you down for a personal loan, a smaller lender with risk-based pricing might lend to you without a guarantor. These lenders set loan rates based on a borrower's risk profile and creditworthiness.

This means you have a better chance of getting a loan on your own. But you will end up with a higher interest rate.

Get a peer-to-peer loan

In a similar way, peer-to-peer loans match borrowers to sources of finance and they also have risk-based pricing. Again, you'll pay a higher rate but your chances of approval are probably higher.

Improve your position as a borrower

If you have the option to wait before applying for credit, you might be better off improving your credit score and applying for a loan without a guarantor.

You could also increase your chances of getting a loan by borrowing a smaller amount.

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Frequently asked questions

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To make sure you get accurate and helpful information, this guide has been reviewed by Rebecca Pike, a member of Finder's Editorial Review Board.
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Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

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Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products. See full bio

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14 Responses

    Default Gravatar
    KylieFebruary 21, 2019

    Hi! I have been approved for a small loan through my work. The only problem is I don’t have a guarantor. I have no family or friends and I have only been living here for 12 months and don’t know anyone. So how and where can I find a guarantor?

      JoshuaFebruary 24, 2019Finder

      Hi Kylie,

      Thanks for getting in touch with Finder. I’m sorry to hear about your problem.

      A guarantor can be anyone who is willing to take on your debt if in case you default on your loan. I can’t specifically tell you where you can find a guarantor since I’m not completely familiar with your situation. Perhaps, you can ask around and finally find someone who wants to be your guarantor.

      If in case you can’t find a guarantor, you might consider getting a small payday loan. If this interests you, you can use our comparison table to conveniently compare fast small personal loans in Australia. You can compare based on the maximum loan amount, loan term, and costs, to name a few. Once you found the right one for you, click on the “Go to site” green button to learn more or initiate your application.

      Please make sure that you’ve read the relevant T&Cs or PDS of the loan products before making a decision. Moreover, check the eligibility requirements as well and consider whether the product is right for you.

      I hope this helps. Should you have further questions, please don’t hesitate to reach out again.

      Have a wonderful day!


    Default Gravatar
    CatherineDecember 8, 2018

    I’m looking for a bad credit personal loan and on centrelink, I have a guareentor but having trouble finding places that will help me.
    Can you plz tell me who will actually help me?

      JohnDecember 12, 2018Finder

      Hi Catherine,

      Thank you for reaching out to Finder.

      Payday and cash loans are available to Centrelink applicants as well as those with bad credit. You may refer to our list of lenders who offer bad credit payday loans. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.

      Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!


    Default Gravatar
    DemiMay 9, 2018

    I would like to apply for a personal loan where I can also put down a guarantor.

      Default Gravatar
      JoelMay 9, 2018

      Hi Demi,

      Thanks for leaving a question on finder.

      Everything you need to know on how to get approved for a loan with a guarantor is in this page you are in. If you have any other specific questions that is not in this guide, please send us a message anytime. :)


    Default Gravatar
    ErinMarch 28, 2017

    Hi, I am currently looking to apply for a personal loan I’m a single mother on the pension and I have recently become aware that my credit isn’t very good I have roughly $20,000 in assets and I am easily able to afford my loan repayments but unfortunately I don’t know anyone who can go as guarantor on the loan for me. I was wondering if you know of anyone who will legally sign as my guarantor on the loan please??

      HaroldMarch 28, 2017Finder

      Hi Erin,

      Thank you for your inquiry. I’m sorry to hear about your situation.

      I’m afraid we don’t specifically know someone who can become your guarantor, but what we do have is a guide that discusses guarantor loans.

      If you can’t find any guarantor, what you can do is decrease the loan amount you are planning to borrow to increase your chance of approval. Aside from that, you should get a better chance of getting approved if you choose bad credit personal loans or pensioner personal loans.

      I hope this information has helped.


    Default Gravatar
    DeeMarch 23, 2017

    Community first don’t accept a guarantor for personal loans where the applicant has a bad credit history. It seems that no lenders do. Have I missed something or is this article false?

      HaroldMarch 24, 2017Finder

      Hi Dee,

      Thank you for your question.

      Please note each bank and lender will have different criteria based on the applications they will consider. You’ll need to get in contact with the lender you’re looking to apply with to confirm your eligibility. With this in mind, you can go through the lenders featured on this page or you can also check our bad credit history to check other options.

      I hope this information has helped.


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